We didn’t know what the opposition was yet. We did not know if we were going to be able to buy the property. But we were assured that if we did not complete all of the tasks on the list before our 60 days were up, that we definitely would not be able to buy our property. So we had to get started on the list, no matter what.
First Up: Hiring the Agronomo
In Italy, if you buy a property used for agricultural purposes, you pay lower real estate transfer taxes. When you buy real estate in Italy, it can be as high as 22% for luxury properties. Normally, it is around 10%, and can even be as low as 1%. But this is all dependent on whether the agronomo determines that your property is an agricultural property. So this was an important project for us, and we needed an agronomo to study the property and certify that it qualified as an agricultural property.
Giorgio and Stefano, our commercialista, knew of a local agronomo and made an introduction. His name was Luca, and fortunately for us, Luca spoke English, and was immediately available for our project. Even better, he thought he could finish before our deadline. To find someone like this during the holiday season was nothing short of a miracle, and we felt very lucky.
Hiring the IAP
Next, we needed to find an Imprenditore Agricolo Professional, or IAP, (pronounced ‘yap’), also known as a Professional Agricultural Entrepreneur in English. For us to operate an agricultural business, we needed at least one board member to be a professional farmer or IAP. So now we were on the hunt for someone qualified in the area, that hopefully spoke English, was available, and interested in joining our company. Again, all during the holidays.
We started asking all of our Italian contacts if they knew any IAPs. This was going to be important to find the right person, as they would become a member of the board. Italy also (of course) has very specific rules for IAPs - they can only be on two boards at a time, one for their own agricultural business and then one more. Also, 51% or more of their annual income must come from the external business, so this means their fees are related to how much they make in their own business. They must charge more than they make from their own business to the 2nd company when they join the board. So many “interesting” rules that would make it more difficult for us to find one.
Amazingly, we were referred to an IAP named Ruggiero who lives nearby, owns a small vineyard and restaurant, and just finished up working on the board of another agriturismo. We had a Zoom meeting where we all hit it off, so we reached an agreement for him to join the board upon closing so we could meet our requirements. Giorgio began drawing up the paperwork and organizing a board of directors meeting and finalizing the necessary steps for adding him to the board.
Completing Registrations
Now that we were on our way to having a certified agricultural company, our commercialista Stefano needed to register us with multiple government agencies. There is the Italian Workers Compensation board, the Unione Provinciale degli Agricoltori di Siena (UPA Siena), which is a provincial farmers' association in Siena and a bunch of other agencies of which I’m not exactly sure what all we signed up for, registered, paid dues for. I just signed and approved payment and after payment so we could get closer to closing.
I assume at some point all these forms and payments will stop or at least slow down, but who knows?
Negotiations with the Sellers
In Italy, things like wall sconces, toilets, and even the terracotta flooring are not by default included in the sale of a property. Sometimes a buyer will arrive to find their beautiful new home stripped of everything, down to the foundation.
The auction description was vague as to what was included, so through our lawyer, we opened a negotiation with the sellers to discuss what we were actually buying. Would the farm animals be included in our private purchase agreement? Maybe. Farm equipment? No, it belongs to the son’s business. Antiques? Some. Toilets? Thankfully yes.
Obtaining Insurance
We would need insurance coverage that started on the 21st of January, the date we were hopefully going to close on our property. We were introduced to Carlo, from Montepulciano, who put together an offer from Allianz. He would need to visit the property in person, but said we could have the policy take effect on 21 January, assuming we signed. Luckily, the insurance process is very similar to the US, so we were able to assess what coverage we needed and get a quote within days. It was nice to have a straightforward process for once.
Hiring Employees
How do you hire and pay someone in Italy? We had no idea, so we started researching and asking our contacts and commercialista. As soon as we thought we understood something, we’d realize we misunderstood. For example, we’d built a financial model doing online research on pay, and salaries seemed quite reasonable. But we didn’t know that when employees talk about their take home pay in Italy, they generally refer to their net salary, not gross like we do in the US.
Oof, time to redo our financial model, because our employee costs were going way up.
Luckily, our commercialista Stefano was on it and guided us through registering to be an agricultural employer. He hired a consultant in Siena to help with our first employee contract and get us set up to do payroll. During this process, we met Anna, the seller’s daughter, who was already doing great work at the villa. We hoped that we could offer her to stay and work for us if everything went smoothly, but we still had no guarantee that it would.
Closing Deed Preparation
Pietro, our notaio, needed time to write up the deed that we would sign together at closing. This, of course, is based on our agronomo completing the “box.” Yes, this is a technical term for a physical box must be prepared with all the paperwork, surveys and assessments that demonstrate we are a legitimate farming operation. More to the point, in Italian agriturismos, the scale of your farming operation informs how many guest rooms you can have. So we needed our agronomo to demonstrate not only that we are legitimate, but that our operations are big enough to support needing our 14 guest rooms.
On the day before closing, we were still missing key documents from the Monticiano commune, so Giorgio made the call (thankfully) to to hire a local geometra to make a drive to the municipal building and dig up the required paperwork and run it over to Pietro in Siena. It was a frantic dash to get all the paperwork to the right place, but Giorgio’s plan worked and the deed was prepared for signatures just in time.
Board of Director Meetings
We held several board of director meetings to authorize Andrea, one of Giorgio’s associates, to prepare the cash checks for the purchase, and for Giorgio to sign on our company's behalf at the signing. During this entire process, I still didn’t have access to our Italian bank account, as they require an in-person meeting first. So I had hired Andrea to be my proxy - and have access to our bank account to pay bills, tax payments, get cashier’s checks, etc. However, I had never met Andrea. It was a complete leap of faith to give someone that much control over our money, but if it helped us get closer to closing on our property, then we had to do it.
Closing
In anticipation of closing by 12pm on the 21st of January, I bought a plane ticket leaving at 2pm that afternoon. I figured I’d wake up, see if it closed and then jump on my flight over to pick up the keys.
About a week out, we purchased Euros and wired the money to our new trusted surrogate banker Andrea (whom we still had not met) and crossed our fingers he’d get a cashier’s check for the purchase of the property and not disappear to retire in the Bahamas.
Miraculously, we had made it through most of the list. There was only one thing left: hoping everyone showed up on the day of signing to finish the deal. There was still the possibility that the opposition would hang everything up, and no one would show up on the 21st.
Each day we’d get a WhatsApp update from Giorgio on the percent chance we would close on the 21st. Some days it was up, others it was down. We were riding a roller coaster over the holidays and into late January, and it would not be over until the last signature was signed.
